A common response to a risk is to mitigate or control it via a mitigation plan. This plan costs money to implement but has the objective of reducing either the likelihood or cost impact of the risk, or both. This reduced probability and cost impact results in a lower target weighted cost impact for your risk.

1. The target cost impact of your risk is the residual cost impact (if any) after the mitigation plan or other response has been executed. If the target cost impact will go to zero be sure to change the target cost impact to 0 in this cell
2. The weighted target cost impact is calculated as either the target probability multiplied by the target cost impact (operational project risks) or the target probability times target cost impact times overall target severity rating (proposal risks)
3. The originally assessed weighted cost impact (from the ASSESSMENT tab) is displayed for reference purposes
4. The mitigation plan cost is the sum of the costs of each mitigation plan task
5. The "improvement" is the reduction in the weighted cost impact of your risk minus the cost of the mitigation plan
6. The return on investment or ROI for your mitigation plan is the improvement over the mitigation plan cost, or:

        ( Original weighted cost impact - residual weighted cost impact - mitigation plan cost ) / mitigation plan cost

Mitigation plan ROI is useful to determine the most valuable mitigation plans, when there are many risks each with conflicting mitigation plans and a limited budget